Olive Garden Turns to Tech for a Turnaround

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Olive Garden is ready to stop living in the past. The struggling chain of Italian casual restaurants is ready to incorporate online ordering and test tabletop tablets this year, according to the Orlando Sentinel.

Trends haven't been working in favor of Olive Garden parent Darden Restaurants (DRI) lately. It's been months since it announced plans to sell its rudderless Red Lobster concept or spin it off if it can't find a suitor. No one's biting on the line for the seafood chain. Olive Garden is holding up marginally better, but it too has posted negative store-level sales in recent quarters.

The Internet may not necessarily save Olive Garden, but it will at least give it a chance to remain relevant. Olive Garden will begin rolling out online ordering for takeout orders this month, but the process will drag out until August before the entire chain of 836 restaurants is on board. The more ambitious move will come later this year when it tests the potential of outfitting its tables with tablets for waiter-less ordering.

Take Two Tablets and Call Me in the Entree

Brinker International's (EAT) Chili's and DineEquity's (DIN) Applebee's turned heads late last year when they announced their commitments to breaking in tabletop tablets in 2014.

Applebee's has ordered 100,000 tablets that will be installed at every table of the casual dining chain by the end of the year. Customers will be able to browse the menu, order and swipe their credit cards to pay their bills. The restaurateur's CEO promised that this wasn't a labor play. It will still keep a wait staff to satisfy immediate needs and service for customers who prefer personal interaction. The company providing the technology to Applebee's points out that the average customer in a restaurant incorporating its touchscreen terminals spends more, tips more and leaves earlier.

Chili's announced in September that it would go with Ziosk -- the same company that will provide the tablets for Darden's Olive Garden test. The devices will allow customers to order drink refills and dessert and pay with credit cards. Will Olive Garden's tablets completely automate wait staff functions? Will they merely offer diversions in the form of games? Or are they just a way to order more of those tasty unlimited bread sticks? No matter how far Olive Garden goes, it can only help after a few quarters of declining traffic.

Order Up

Tablets are still relatively new for casual dining chains, but online ordering is something that's been around for years.

Olive Garden is certainly late to this trend despite having a healthy takeout business. The chain's latest TV commercial pitches a "buy one, take one" deal, where patrons can enjoy a meal at the restaurant and get a second complete meal to go for as little as $12.99 for the pairing. One can argue that the last thing that someone craves after eating a large Italian meal is a second bountiful Italian meal, but it speaks to the popularity of its to-go business.

Embracing online ordering at a time when Internet usage and smartphone adoption has gone mainstream can only help. Darden's struggling to turn Red Lobster and Olive Garden around, and those challenges already find it ready to move on when it comes to Red Lobster. Olive Garden has a lot to prove, and hopefully the tech update will breathe new life into this very challenging business.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.



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31 Comments

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mgoose811

Really? Perhaps they could do something simpler and cheaper - train your wait staff and pay them a higher wage to attract better, longer-term employees. Pay your kitchen staff enough so that they don't just "not show up" for their shift.

Every time I have gone to either Olive Garden or Applebee's (or frankly Chili's near my office as well) for the past few years, it takes hours for either lunch or dinner, and it shouldn't. Attracting the attention of the wait staff is difficult at best. At Chili's the final time, I was seated and proceeded to wait for over 35 minutes and was never approached by anyone to my table to even ask if I would like a glass of water. Like most working people, I have 1 hour for lunch. The hostess thanks me for coming as I gave up, and I told her that no one had even bothered to come to my table or give me a glass of water, and I had to leave to run through a drive through for food and return to work. No apology, just a blank look.

I have not returned there nor will I, no matter what nifty table gadgets or coupons you have. Restaurants need to concentrate on the basics = good food, clean environment (clean BATHROOMS!!) and an attentive, competent waitstaff, and you have a winning combo. Lack any of those and you will fail.

April 18 2014 at 9:27 AM Report abuse rate up rate down Reply
Jbar056

On top of the less than "Extreme Cusine" MOST of these big chain giants have, Now were gonna swap germs with the general public on dirty touchscreen tablet screens? These companies continue grasping at straws trying to hock their over priced meals. I'm not onboard with their new concepts! Another example of corporate greed at it's finest! We need to go back to more traditional ways of living!!! I can't get enough of Moms home cookin!

April 18 2014 at 8:38 AM Report abuse rate up rate down Reply
plewdawg

Try this: IMPROVE the food! Broaden the menu!

April 18 2014 at 7:29 AM Report abuse rate up rate down Reply
PioneerSusan

I gave OG a try again a few days ago.. Don't be fooled.. Nothing has changed.. but the Price... in fact the Taste of the Entrees are nothing short of nauseating... Chicken just melts in your mouth without any semblence of chicken taste... you only get that from the overly fake seasoning.. they put in their "sauces" that seem to swim in some kind of oil or fake butter mixture.... I dont think its real chicken.. it some kind of pressed junk that bears no resemblence to the real thing... Appetizers are equally as nauseating... stick with anything that does NOT have any kind of sauce on it.. or "stuffing" as they are filled with all kinds of garbage that will turn your stomach.. Literally. No amount of Coupon Savings will make your visit a happy one... from a real customer..

April 18 2014 at 6:21 AM Report abuse rate up rate down Reply
Jimmy McCully

I sure don't want to order with a tablet. Like many people who commented, I want personal service, not a machine to type into. I wouldn't give much of a tip if they just bring your order. Olive Garden in Wake Forest is always crowded and there seems to be a lot of cars there. My complaint is that the food is too expensive! I have, for the most part, enjoyed the food, and have had good service at our local restaurant. I don't know about Red Lobster because I don't really like fish much.

April 17 2014 at 10:57 PM Report abuse rate up rate down Reply
petpetdon

Red Lobster, seafood for beginners. Olive Garden, Italian food for beginners.

April 17 2014 at 10:54 PM Report abuse +1 rate up rate down Reply
edlh16

there is ALWAYS a line at the Olive Garden nearest me...how can the chain be doing poorly??

April 17 2014 at 10:37 PM Report abuse +1 rate up rate down Reply
fred

Olive Garden in Clarksville, Indiana does well and has a great staff. Ate there tonight for the third time in three months. Hope other locations do as well, but doesn't sound as if they do.

April 17 2014 at 9:12 PM Report abuse rate up rate down Reply
1 reply to fred's comment
petpetdon

Fred, YOU people in the Midwest don't have a clue what real Italian food is. You probably think Pizza Hut is great pizza too.

April 17 2014 at 10:51 PM Report abuse rate up rate down Reply
mnbigbuddy

They need to forget about all this stuff and just start serving good food and they will flourish.

April 17 2014 at 8:45 PM Report abuse +2 rate up rate down Reply
M

"Olive Garden is holding up marginally better, but it too has posted negative store-level sales in recent quarters."

And this is supposed to have NOTHING to do with the labor issues consumer pressure forced the chain to back away from?
My, my, what short memories *we* seem to have.


As far as using the tablets handled by **everyone** to swipe credit cards goes, the security on those better be *bulletproof*, (or at least *hacker proof*).

April 17 2014 at 7:49 PM Report abuse rate up rate down Reply